It depends on my degree of confidence in those figures, the chance of them continuing in the future, the expected distribution of returns, my risk preferences, and a whole bunch of other factors.
You are asking what you think is a simple question, but it doesn't have a simple answer. We need to make a lot of assumptions to get a tractable answer.
Let's assume I am risk neutral, so I want to maximise expected returns. Let's also assume I am 100% confident that the track record will continue. Let's finally assume that the profile of the fund is that there is a 50/50 chance that the return will be -10% and a 50% chance it will be +35%. That gives an arithmetic average of 25% a year (geometric return will be a bit lower).
Then to maximise expected return I would put 100% of my money in the risky fund B (expected return, 25% vs 5%).
Now you want to impose a maximum drawdown constraint. The maximum d/d and expected return would be:
100% in A: zero d/d, expected return 5%
50% in A: -5% d/d, expected return 15%
100% in B: -10% d/d, expected return 25%
Depending on your max d/d constraint you'd pick from one of these options, or an interpolated version. That's a pretty trivial exercise of course, but then I'm not sure what you hoped to get out of asking this question?
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